The summit where everyone lost

European leaders are claiming victory, but nothing has been resolved. And Britain is in the worst of

What a mess. Although leaders sought, with tedious predictability, to portray themselves as victors, last week's summit in Brussels was one where everybody lost. David Cameron used a veto which did not block anything, and instead relegated Britain to semi-detached EU status. Angela Merkel won a treaty that may never be ratified and with terms that most countries will not be able to keep to. And although the European Central Bank has been handed control over the two EU bail-out funds, and the IMF given an extra €200bn, there is still no "big bazooka' to calm the financial markets. The euro crisis has not been resolved.

British eurosceptics took to the airwaves to celebrate David Cameron's surprising move to veto plans for a very modest - and very conservative - treaty revision. The problem is that a veto implies the ability to stop something, whereas treaty change is going to happen anyway.

But what has Cameron won? The safeguards for the City that he talked about? Nope, even though President Van Rompuy had worked on texts with Cameron's officials before the summit started. It was when Cameron demanded that the UK should be exempted from financial regulation that the problems started. This was always going to be an impossible demand, but Cameron and his officials knew this and had prepared protocols and declarations that, without being guarantees, would have been enough to take back to London. Although Sarkozy initially refused this, Cameron should have been able to win out eventually. Unfortunately, Cameron, already regarded as a diplomatic lightweight by most leaders, over-played his hand, threatened a veto and Sarkozy called his bluff.

It is hard to understand why he chose, as Lord Kerr put it, to "pick up the ball and walk off the pitch before the game started". This was, remember, just a summit. A new treaty was not decided here, only the principals. It would have been quite natural for Cameron to take the deal to the House of Commons in order to establish a clear and detailed mandate for further negotiation.

Cameron has actually done his party and the moderate eurosceptics in his party no good. Although dramatically wielding the veto guaranteed 24 hours of positive coverage from eurosceptics, the reality is that Britain has been left with the worst of all worlds. He didn't win any safeguards - in fact, the City will almost certainly pay a large price as the UK was already struggling to find allies on financial regulation in the Council of Ministers and will now find it even harder -and an unnecessary and politically dangerous, treaty will go through anyway with Britain locked out of the room. Only the Conservatives who actually want Britain to leave the EU should be happy.

Indeed, an "in/out" referendum on our EU membership is now almost inevitable. Conservatives will soon grow frustrated at paying higher costs for fewer of the benefits of membership. If Cameron remains committed to EU membership, this will push more Tories into the arms of Ukip and the BNP.

Friday's BBC Newsnight programme, which treated us to Lib Dem peer Lord Oakeshott and Bernard Jenkin tearing lumps out of each other, highlighted the new tension that will divide the coalition. Yet amidst Oakeshott's anger and Jenkin's gloating came one revealing admission: Jenkin did not, he said, want Britain to leave the EU. Instead, he saw the summit as the first step towards re-negotiating our terms of membership and repatriating some powers. Jenkin's remarks are representative of most Tory MPs. But he is either disingenuous or stunningly naïve. Any goodwill towards the Conservatives has now evaporated - even though right-wing parties are in power in France, Germany, Italy and Spain. There is only one option facing Britain in the future: stay in or sod off.

There is nothing here for Europhiles to rejoice over either. As the only country not to take the summit deal back to their national parliament, the UK has been firmly established as a semi-detached member of the EU. Having worked hard to win allies and influence following the enmity caused by the Iraq war, Labour and Lib Dem MEPs will now have to cope with the suspicion and anger of their European sister-parties. The notion that Britain is intrinsically anti-European, disruptive and a "wrecker" will be hard to shift. They will also have to cope with a national debate on EU policy that will, even more than before, be divided along in/out lines.

The treaty proposals also demonstrated how toothless the European left currently is. Conservatives are now in power in Germany, France, Britain, Italy and Spain, and the terms of reference have been dictated by Merkel and, to a lesser extent, Sarkozy. The result is, as Owen Jones remarked, a treaty that locks in austerity for the eurozone. In particular, establishing a 0.5 per cent ceiling for structural deficits is a rule that few countries will be able to adhere to and will make it impossible for countries to pursue expansionary policies in the short or medium term. Europe's economies desperately need to achieve better budgetary discipline, but this is more of a strait-jacket than a life-jacket.

However, it is interesting that both François Hollande, the Socialist candidate for the French Presidency, and Peer Steinbruck, the leader of the German SPD, have both attacked the proposals. Merkel remains a highly embattled Chancellor while Hollande, twenty points ahead of Sarkozy in the polls, is likely to be President within months. If the Merkozy duopoly stays committed to a full treaty change, then ratification will be very bumpy and uncertain.

But while the euro crisis remains unresolved, a new crisis has been created concerning Britain's status in the EU. Cameron has achieved the unique feat of leading his party inexorably towards another disastrous split over Europe while driving a decisive wedge between him and his Lib Dem coalition partners. More importantly, he has ensured that a summit about the future of the euro will instead be remembered as the time when Britain willingly isolated itself for no reward and moved dangerously close to Europe's exit door.

Benjamin Fox is political adviser to the Socialist and Democrat group in the European Parliament

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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.